COLCO NEWS

Dr. David E. Bond, VIA email: David.Bond@commerce.ubc.ca
(Formerly Senior Consulting Economist, HSBC Bank Canada)

Dear Dr. Bond:

RE: Leaky Condos, Bankruptcy & HSBC

We have noted the recent news reports that HSBC terminated your consulting contract because the bank did not like you expressing your own views regarding the probable minimal efficacy of promised tax cuts in stimulating the economy.

We have at hand your latest (last?) Economic Bulletin on HSBC letterhead dated January 8, 2001, titled; Who deserves special treatment?  You address the recent run-up of natural gas prices and calls for relief by various sectors of the economy.  You refer to a “chorus of squeals.”  You point out that “the rise in natural gas prices is one of the hazards of doing business” and that “this struggle for survival is no different than that faced [by] any other company operating in the uncertain world of business.”  You state that the costs of bailing out hot houses and other businesses “would be enormous and the prime benefit of the market place – the allocation of limited resources to those activities that are most productive – would be lost.”

Your views regarding the utility of bankruptcy are of particular interest to the owners of leaky rotten condos:  “Society and the capitalistic market system are not completely without compassion.  There are bankruptcy laws which provide for an orderly resolution of cases where firms or individuals find their debts in excess of their assets and with little or no prospect of reversing the situation.  Bankruptcy is a fundamental part of a healthy and growing economy.  Asking for government handouts is not.  Such handouts to postpone the inevitable have cost Canada billions of dollars ….”  

We note that you expressed these “personal observations” without a negative reaction from HSBC and that HSBC distributed them widely on HSBC letterhead.

Given that you now have more “free time”, the Coalition of Leaky Condo Owners would like you to apply your expertise to analyze “the leaky condo problem”.  We are willing to assist you in this endeavour with hard cold data accompanied by a chorus of squeals and muted sobbing.  We would ask that you conduct both micro- and macro- analyses.  We are willing to distribute your views widely, including to the government and to HSBC.
Quite frankly, many of us want an “orderly resolution”, and don’t know whether to go bankrupt or not.  We are not quite sure of the advice we get from institutions such as HSBC on this matter, especially if we owe them money.  Perhaps you can help.  

Yours truly,

Dr. James Balderson